INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Total income tax expense is presented below:



	Year Ended December 31,
(in millions)	2018			2017			2016
Income tax expense		$462			$260			$489
Tax effect of changes in OCI	(96		)	(7		)	(168		)
Total comprehensive income tax expense		$366			$253			$321

Schedule of Components of Income Tax Expense

Components of income tax expense are presented below:



(in millions)	Current		Deferred			Total
Year Ended December 31, 2018
U.S. federal		$271		$90			$361
State and local	94		7			101
Total		$365		$97			$462
Year Ended December 31, 2017
U.S. federal		$376		($142	)		$234
State and local	20		6			26
Total		$396		($136	)		$260
Year Ended December 31, 2016
U.S. federal		$292		$159			$451
State and local	44		(6		)	38
Total		$336		$153			$489

Schedule of Effective Income Tax Rate Reconciliation

The effective income tax rate differed from the U.S. federal income tax rate of 21% for the year ended December 31, 2018, and 35% for the years ended December 31, 2017 and 2016, as presented below:



	Year Ended December 31,
	2018					2017					2016
(in millions, except ratio data)	Amount			Rate		Amount			Rate		Amount			Rate
U.S. Federal income tax expense and tax rate		$459		21.0	%		$669		35.0	%		$537		35.0	%
Increase (decrease) resulting from:
Federal rate change	(34		)	(1.6	)	(331		)	(17.3	)	—			—
State and local income taxes (net of federal benefit)	89			4.1		46			2.4		38			2.5
Bank-owned life insurance	(12		)	(0.5	)	(19		)	(1.0	)	(19		)	(1.2	)
Tax-exempt interest	(15		)	(0.7	)	(21		)	(1.1	)	(19		)	(1.3	)
Tax advantaged investments (including related credits)	(44		)	(2.0	)	(51		)	(2.7	)	(31		)	(2.0	)
Other tax credits	(8		)	(0.4	)	(3		)	(0.1	)	(14		)	(0.9	)
Adjustments for uncertain tax positions	1			0.1		(23		)	(1.2	)	—			—
Non-deductible FDIC premiums	21			1.0		—			—		—			—
Other	5			0.2		(7		)	(0.4	)	(3		)	(0.2	)
Total income tax expense and tax rate		$462		21.2	%		$260		13.6	%		$489		31.9	%

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities are presented below:



	December 31,
(in millions)	2018			2017
Deferred tax assets:
Other comprehensive income		$366			$271
Allowance for credit losses	308			310
State net operating loss carryforwards	90			88
Accrued expenses not currently deductible	36			40
Investment and other tax credit carryforwards	74			65
Fair value adjustments	28			27
Total deferred tax assets	902			801
Valuation allowance	(110		)	(105		)
Deferred tax assets, net of valuation allowance	792			696
Deferred tax liabilities:
Leasing transactions	527			525
Amortization of intangibles	364			352
Depreciation	195			182
Pension and other employee compensation plans	127			110
Partnerships	51			37
Deferred Income	50			27
MSRs	51			34
Total deferred tax liabilities	1,365			1,267
Net deferred tax liability		$573			$571

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amount of unrecognized tax benefits is presented below:



	December 31,
(in millions)	2018		2017			2016
Balance at the beginning of the year		$5		$42			$62
Gross increase for tax positions related to current year	3		—			—
Gross decrease for tax positions related to prior years	—		(27		)	(19		)
Gross increase for tax positions related to prior years	—		—			1
Decreases for tax positions as a result of the lapse of the statutes of limitations	—		(1		)	(2		)
Decreases for tax positions related to settlements with taxing authorities	—		(9		)	—
Balance at end of year		$8		$5			$42